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<SEC-DOCUMENT>0001116354-03-000039.txt : 20030814
<SEC-HEADER>0001116354-03-000039.hdr.sgml : 20030814
<ACCEPTANCE-DATETIME>20030814081303
ACCESSION NUMBER:		0001116354-03-000039
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20030630
FILED AS OF DATE:		20030814

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GLEN BURNIE BANCORP
		CENTRAL INDEX KEY:			0000890066
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				521782444
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24047
		FILM NUMBER:		03843347

	BUSINESS ADDRESS:	
		STREET 1:		101 CRAIN HWY SE
		CITY:			GLEN BURNIE
		STATE:			MD
		ZIP:			21227
		BUSINESS PHONE:		4107663300

	MAIL ADDRESS:	
		STREET 1:		101 CRAIN HWY SE
		CITY:			GLEN BURNIE
		STATE:			MD
		ZIP:			21227
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>gbb6300310q.txt
<DESCRIPTION>GLEN BURNIE BANCORP JUNE 30, 2003 10-Q
<TEXT>
                 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

            [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                 For the Quarterly period ended June 30, 2003

                                       OR
          [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                         Commission file number 0-24047


                              GLEN BURNIE BANCORP

             (Exact name of registrant as specified in its charter)

Maryland                                                         52-1782444
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

101 Crain Highway, S.E.
Glen Burnie, Maryland                                              21061
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code: (410) 766-3300

                                  Inapplicable
              (Former name, former address and former fiscal year
                         if changed from last report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X   No
                                      ---    ---

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act. Yes     No X
                                              ---    ---

At July 30, 2003, the number of shares outstanding of the registrant's common
stock was 1,683,668.



<PAGE>


                                TABLE OF CONTENTS




Part I - Financial Information                                            Page
                                                                          ----

Item 1.  Consolidated Financial Statements:
- -------

         Condensed Consolidated Balance Sheets,
         June 30, 2003 (unaudited) and December 31, 2002 (audited)         3

         Condensed Consolidated Statements of Income for the Three and
         Six Months Ended June 30, 2003 and 2002 (unaudited)               4

         Condensed Consolidated Statements of
         Comprehensive Income for the Three and Six
         Months Ended June 30, 2003 and 2002
         (unaudited) 5

         Condensed Consolidated Statements of Cash Flows for the Six
         Months Ended June 30, 2003 and 2002 (unaudited)                   6

         Notes to Unaudited Condensed Consolidated Financial Statements    7

Item 2.  Management's Discussion and Analysis of Financial Condition
- -------  and Results of Operations                                         8


Item 3.  Quantitative And Qualitative Disclosure About Market Risk        12
- -------

Item 4.  Disclosure Controls and Procedures                               13
- -------



Part II - Other Information

Item 4.           Submission of Matters to a Vote of Security Holders    14
- -------

Item 6.           Exhibits and Reports on Form 8-K                       14
- -------

                  Signatures                                             15


<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                      GLEN BURNIE BANCORP AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                       June 30, 2003       December 31, 2002
                                    ASSETS                              (unaudited)            (audited)
                                                                        -----------            ---------

<S>                                                                       <C>                   <C>
Cash and due from banks                                                   $12,349               $11,297
Interest-bearing deposits in other financial institutions                      67                    41
Federal funds sold                                                          2,577                 4,404
                                                                          -------               -------
       Cash and cash equivalents                                           14,993                15,742
Certificates of deposit in other financial institutions                       100                   100
Investment securities available for sale, at fair value                   101,563                84,658
Investment securities held to maturity, at cost
   (fair value June 30: $5,133;  December 31: $7,616)                       4,813                 7,202
Federal Home Loan Bank stock, at cost                                         896                   703
Common Stock in the Glen Burnie Statutory Trust I                             155                   155
Loans, less allowance for credit losses
   (June 30: $2,337; December 31: $2,515)                                 161,846               158,287
Premises and equipment, at cost, less accumulated depreciation              4,160                 4,143
Other real estate owned                                                       175                   413
Cash value of life insurance                                                5,158                 5,025
Other assets                                                                2,951                 2,978
                                                                         --------              --------
                   Total assets                                          $296,810              $279,406
                                                                         ========              ========

                     LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Deposits                                                                 $256,302             $241,420
Short-term borrowings                                                       1,813                  837
Long-term borrowings                                                        7,239                7,251
Guaranteed preferred beneficial interests in Glen Burnie Bancorp
   junior subordinated debentures                                           5,155                5,155
Other liabilities                                                           2,784                2,953
                                                                         --------             --------
                  Total liabilities                                       273,293              257,616
                                                                         --------             --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Common stock, par value $1, authorized 15,000,000 shares;
   Issued and outstanding: June 30: 1,682,773 shares;
   December 31: 1,677,173 shares                                            1,683                1,677
Surplus                                                                    10,736               10,638
Retained earnings                                                           8,933                7,947
Accumulated other comprehensive income, net of tax                          2,165                1,528
                                                                         --------             --------
                   Total stockholders' equity                              23,517               21,790
                                                                         --------             --------
                   Total liabilities and stockholders' equity            $296,810             $279,406
                                                                         ========             ========


     See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                       3
<PAGE>


                      GLEN BURNIE BANCORP AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                (Dollars in Thousands, Except Per Share Amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                 Three Months Ended June 30,        Six Months Ended June 30,
                                                                 ---------------------------        -------------------------
                                                                      2003           2002             2003           2002
                                                                      ----           ----             ----           ----
Interest income on:
<S>                                                                 <C>             <C>             <C>            <C>
   Loans, including fees                                            $2,830          $3,091          $5,649         $6,206
   U.S. Treasury and U.S. Government agency securities                 526             674           1,013          1,279
   State and Municipal securities                                      435             281             810            539
   Other                                                               118             132             249            275
                                                                    ------          ------          ------         ------
    Total interest income                                            3,909           4,178           7,721          8,299
                                                                    ------          ------          ------         ------

Interest expense on:
   Deposits                                                            864           1,039           1,763          2,163
   Short-term borrowings                                                 1               1               2              3
   Long-term borrowings                                                110             107             218            213
   Junior subordinated debentures                                      137             137             273            273
                                                                    ------          ------          ------         ------
    Total interest expense                                           1,112           1,284           2,256          2,652
                                                                    ------          ------          ------         ------

     Net interest income                                             2,797           2,894           5,465          5,647

Provision for credit losses                                              0               0               0              0
                                                                    ------          ------          ------         ------
     Net interest income after provision for credit losses           2,797           2,894           5,465          5,647
                                                                    ------          ------          ------         ------

Other income:
   Service charges on deposit accounts                                 249             251             507            500
   Other fees and commissions                                          236             148             444            286
   Other non-interest income                                             3               1               5              4
   Gain on termination of post-retirement plan                           0               0               0            764
   Gains on investment securities                                       15               2             107              6
                                                                    ------          ------          ------         ------
       Total other income                                              503             402           1,063          1,560
                                                                    ------          ------          ------         ------

Other expenses:
   Salaries and employee benefits                                    1,483           1,494           2,948          2,918
   Occupancy                                                           164             146             376            292
   Other expenses                                                      798             894           1,596          1,794
                                                                    ------          ------          ------         ------
       Total other expenses                                          2,445           2,534           4,920          5,004
                                                                    ------          ------          ------         ------

Income before income taxes                                             855             762           1,608          2,203

Income tax expense                                                     122             175             219            628
                                                                    ------          ------          ------         ------
Net income                                                           $ 733           $ 587          $1,389         $1,575
                                                                    ======           =====          ======         ======

Basic and diluted earnings per share of common stock                  $.44            $.35            $.83           $.94
                                                                      ====            ====            ====           ====

Weighted average shares of common stock outstanding              1,680,270       1,666,052       1,678,807      1,664,911
                                                                 =========       =========       =========      =========
Dividends declared per share of common stock                          $.12            $.10            $.24           $.20
                                                                      ====            ====            ====           ====

     See accompanying notes to condensed consolidated financial statements.

</TABLE>

                                       4
<PAGE>


                      GLEN BURNIE BANCORP AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                             (Dollars in Thousands)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                         Three Months Ended June 30,       Six Months Ended June 30,
                                                         ---------------------------       -------------------------
                                                             2003           2002               2003        2002
                                                             ----           ----               ----        ----

<S>                                                          <C>            <C>               <C>         <C>
Net income                                                   $733           $587              $1,389      $1,575

Other comprehensive income (loss), net of tax

   Unrealized gains (losses) securities:

       Unrealized holding gains arising
       during period                                          873            995                 703         759

       Reclassification adjustment for gains
       included in net income                                 (56)            (1)                (66)         (2)
                                                           ------         ------              ------      ------
Comprehensive income                                       $1,550         $1,581              $2,026      $2,332
                                                           ======         ======              ======      ======


     See accompanying notes to condensed consolidated financial statements.
</TABLE>



                                       5
<PAGE>



                      GLEN BURNIE BANCORP AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                         Six Months Ended June 30,
                                                                                           2003              2002
                                                                                           ----              ----

Cash flows from operating activities:
<S>                                                                                        <C>              <C>
Net income                                                                                 $1,389           $1,575
Adjustments to reconcile net income to net cash provided by operating activities:
   Depreciation, amortization, and accretion                                                  157               53
   Compensation expense from vested stock options                                               0               39
   Provision for credit losses                                                                  0                0
   Gains on disposals of assets, net                                                          (88)              (3)
   Income on investment in life insurance                                                    (133)               0
   Changes in assets and liabilities:
      Increase in other assets                                                               (245)            (411)
      Decrease in other liabilities                                                           (91)            (703)
                                                                                          -------             ----

Net cash provided by operating activities                                                     989              550
                                                                                              ---              ---

Cash flows from investing activities:
    Maturities of available for sale mortgage-backed securities                            14,762            4,687
    Proceeds from disposals of investment securities                                        5,562            4,136
    Purchases of investment securities                                                    (33,530)         (20,204)
    Purchase of Federal Home Loan Bank stock                                                 (193)             (51)
    (Increase) decrease in loans, net                                                      (3,559)           3,283
    Purchases of premises and equipment                                                      (469)            (176)
    Proceeds from sale of other real estate                                                   220                3
                                                                                          -------          -------

Net cash used by investing activities                                                     (17,207)          (8,322)
                                                                                          --------         -------

Cash flows from financing activities:
    Increase in deposits, net                                                              14,882            3,968
    Increase (decrease) in short-term borrowings                                              976             (252)
    Repayment of long-term borrowings                                                         (12)             (12)
    Dividends paid                                                                           (481)            (362)
    Common stock dividends reinvested                                                          86               72
    Issuance of common stock                                                                   18               32
                                                                                          -------           ------

Net cash provided by financing activities                                                  15,469            3,446
                                                                                          -------           ------

Decrease in cash and cash equivalents                                                        (749)          (4,326)

Cash and cash equivalents, beginning of year                                               15,742           18,220
                                                                                          -------          -------

Cash and cash equivalents, end of period                                                  $14,993          $13,894
                                                                                          =======          =======



     See accompanying notes to condensed consolidated financial statements.

</TABLE>

                                       6
<PAGE>


                      GLEN BURNIE BANCORP AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

          The  accompanying  unaudited  consolidated  financial  statements were
prepared in accordance with  instructions for Form 10-Q and,  therefore,  do not
include all  information  and notes  necessary  for a complete  presentation  of
financial position, results of operations,  changes in stockholders' equity, and
cash flows in conformity with accounting  principles  generally  accepted in the
United States of America.  However,  all adjustments  (consisting only of normal
recurring  accruals)  which,  in the opinion of management,  are necessary for a
fair presentation of the unaudited  consolidated  financial statements have been
included in the results of  operations  for the three and six months  ended June
30, 2003 and 2002.

          Operating  results for the three and six-month  periods ended June 30,
2003 are not necessarily  indicative of the results that may be expected for the
year ending December 31, 2003.

NOTE 2 -EARNINGS PER SHARE

          Basic  earnings per share of common stock are computed by dividing net
earnings by the weighted average number of common shares  outstanding during the
period.  Diluted  earnings per share are  calculated  by  including  the average
dilutive  common stock  equivalents  outstanding  during the  periods.  Dilutive
common equivalent shares consist of stock options, calculated using the treasury
stock method.

<TABLE>
<CAPTION>
                                                       Three Months Ended June 30,      Six Months Ended June 30,
                                                       ---------------------------      -------------------------
                                                           2003            2002            2003           2002
                                                           ----            ----            ----           ----

Diluted:
<S>                                                     <C>              <C>           <C>            <C>
  Net income                                            $ 733,000        $587,000      $1,389,000     $1,575,000
  Weighted average common shares outstanding            1,680,270       1,666,052       1,678,807      1,664,911
  Dilutive effect of stock options                          3,190           2,573           3,190          1,286
                                                        ---------       ---------      ----------     ----------
  Average common shares outstanding - diluted           1,683,460       1,668,625       1,681,997      1,666,197
  Diluted net income per share                              $0.44           $0.35           $0.83          $0.94
                                                            =====           =====           =====          =====

</TABLE>

NOTE 3 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

          In May 2003, the Financial  Accounting  Standards  Board (FASB) issued
Statement  of Financial  Accounting  Standard  No. 150,  Accounting  for Certain
Financial  Instruments with Characteristics of Both Liabilities and Equity. This
statement  establishes  standards  for how an  issuer  classifies  and  measures
certain  financial  instruments  with  characteristics  of both  liabilities and
equity.  In  management's  opinion,  the Company and the Bank are  currently  in
compliance with all applicable provisions of this pronouncement.




                                       7
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

RESULTS OF OPERATIONS

          General.  Glen Burnie Bancorp, a Maryland corporation (the "Company"),
and its  subsidiaries,  The Bank of Glen Burnie (the "Bank") and GBB Properties,
Inc.,  both  Maryland  corporations,  and  Glen  Burnie  Statutory  Trust  I,  a
Connecticut  business trust, had consolidated net income of $733,000 ($.44 basic
and  diluted  earnings  per share) for the second  quarter of 2003,  compared to
second quarter 2002 consolidated net income of $587,000 ($0.35 basic and diluted
earnings  per  share).  The  increase in  consolidated  net income was due to an
increase in other  income  partially  offset by a decrease  in  interest  income
earned on  loans,  and a  reduction  in  interest  expense  and other  expenses.
Year-to-date  consolidated net income for the six months ended June 30, 2003 was
$1,389,000 ($0.83 basic and diluted earnings per share),  compared to $1,575,000
($0.94  basic and diluted  earnings per share) for the six months ended June 30,
2002.  The  decrease  for the six  month  period is  primarily  due to a gain of
$764,000  arising  from the  negative  amendment  on the Bank's  post-retirement
health insurance  benefit plan which was recognized in the first quarter of 2002
and not  repeated in the 2003 period,  partially  offset by the  recognition  of
other income and investment securities gains for the 2003 period.

          Net Interest  Income.  The Company's  consolidated net interest income
prior to provision for credit losses for the three and six months ended June 30,
2003 was $2,797,000  and  $5,465,000,  respectively,  compared to $2,894,000 and
$5,647,000  for the same  periods in 2002,  a decrease of $97,000 (or 3.35%) for
the three-month  period, and a decrease of $182,000 (or 3.22%) for the six-month
period.  These  decreases were primarily  attributable to a decrease in interest
income  earned on loans  offset  by a  decline  in rates  paid on  deposits.  In
addition,  the decreases for the three and six-month  periods were partially due
to a reallocation of  approximately  $5,000,000 in interest  producing assets to
the  Bank's  bank owned  life  insurance  (BOLI)  program.  Income  from BOLI is
classified as other income.

          Interest income decreased  $269,000 (6.44%) for the three months ended
June 30, 2003, and decreased  $578,000 (6.96%) for the six months ended June 30,
2003, compared to the same periods in 2002. The decrease for the three-month and
six-month period was primarily due to declining average outstanding  balances on
loans and declining  interest  rate  environment  partially  offset by increased
income on state and  municipal  securities.  In  addition,  the decrease for the
three-month  period  was  partially  due  to  a  reallocation  of  approximately
$5,000,000 in interest producing assets to the Bank's BOLI program.  Income from
BOLI is classified as other income.  Interest income on loans decreased $261,000
(8.44%) for the three months ended June 30, 2003 and decreased  $557,000 (8.98%)
for the six months ended June 30, 2003, compared to the same periods in 2002.

          Interest  expense  decreased  $172,000  (13.40%)  for the three months
ended June 30, 2003,  and decreased  $396,000  (14.93%) for the six months ended
June 30,  2003,  compared  to the 2002  periods,  due to an  overall  decline in
interest  rates paid on  deposits  as a result of the  declining  interest  rate
environment.

          The net interest margin is calculated as interest income less interest
expense  expressed as a percentage  of interest  earning  assets.  When interest
income increases at a greater rate than interest  expense,  net interest margins
increase,  and when interest  expense  increases at a greater rate than interest
income,  net interest margins  decrease.  Net interest margins for the three and
six months ended June 30, 2003 were 4.57% and 4.55%,  respectively,  compared to
tax  equivalent net interest  margins of 5.07% and 4.98%,  for the three and six
month periods ended June 30, 2002. The decreases in net interest margins for the
three and six month  periods  ended  June 30,  2003  were  primarily  due to the
repricing of the yield on the Bank's loans and securities  investments resulting
in lower yields, while the Bank's interest expense, represented by interest paid
on deposits, did not reprice at a proportionately lower yields.

          Provision for Credit Losses. The Company made no additional  provision
for credit losses during the three and six month periods ended June 30, 2003 and
2002. As of June 30, 2003,  the allowance for credit losses  equaled  343.68% of
non-accrual  and past due loans  compared  to 429.13% at  December  31, 2002 and
693.23% at June 30, 2002.  During the three and six month periods ended June 30,
2003,   the  Company   recorded  net   charge-offs   of  $43,000  and  $178,000,
respectively, compared to net charge-offs of $66,000 and $172,000, respectively,
during the corresponding  periods of the prior year. On an annualized basis, net
charge-offs for the 2003 period represent 0.22% of the average loan portfolio.



                                       8
<PAGE>

          Other Income.  Other income for the three month period  increased from
$402,000 at June 30, 2002, to $503,000 at June 30, 2003, an increase of $101,000
(25.12%).  For the six month period,  other income  decreased from $1,560,000 at
June 30, 2002 to $1,063,000  at June 30, 2003, a decrease of $497,000  (31.86%).
The increase for the three month period was due to income on BOLI.  The decrease
for the six month period is primarily due to a gain of $764,000 arising from the
negative amendment on the Bank's  post-retirement  health insurance benefit plan
which was  recognized  in the first quarter of 2002 and not repeated in the 2003
period,  partially  offset by the  recognition  of BOLI  income  and  investment
securities gains for the 2003 period.

          Other  Expense.  Other  expenses for the three month period  decreased
from  $2,534,000 at June 30, 2002, to $2,445,000 at June 30, 2003, a decrease of
$89,000  (3.51%).  For the six  month  period,  other  expenses  decreased  from
$5,004,000  at June 30,  2002 to  $4,920,000  at June 30,  2003,  a decrease  of
$84,000  (1.68%).  The decrease for the three and six month period was due to an
overall  general  decrease  in various  other  expenses  partially  offset by an
increase in occupancy expenses.

          Income Taxes. During the three and six months ended June 30, 2003, the
Company  recorded  income tax expense of $122,000  and  $219,000,  respectively,
compared to an income tax expense of $175,000 and  $628,000,  respectively,  for
the corresponding periods of the prior year. The decrease in income tax expenses
reflect the Company's earnings plus an increased tax advantaged portfolio in the
investment  securities  during the current year's periods.  The six month period
reflects the  post-retirement  plan recognized in the first quarter of 2002. The
Company's  effective  tax rate for the three and six month  periods in 2003 were
14.27% and 13.62%,  respectively,  compared to 22.97% and 28.51%,  respectively,
for the prior year periods.

FINANCIAL CONDITION

          General.  The Company's  assets  increased to $296,810,000 at June 30,
2003 from  $279,406,000  at December  31, 2002  primarily  due to an increase in
investment  securities available for sale, while an increase in loans was offset
by a decrease in cash and cash  equivalents  and investment  securities  held to
maturity.  The Bank's net loans totaled  $161,846,000 at June 30, 2003, compared
to  $158,287,000  at December  31,  2002,  an increase  of  $3,559,000  (2.25%),
primarily attributable to an increase in mortgage refinancing activity offset by
a decrease in indirect auto loans.

          The Company's total investment  securities  portfolio  (including both
investment  securities  available  for sale and  investment  securities  held to
maturity) totaled $106,376,000 at June 30, 2003, a $14,516,000 or 15.8% increase
from  $91,860,000  at December  31, 2002.  The Bank's cash and cash  equivalents
(cash due from banks, interest-bearing deposits in other financial institutions,
and federal funds sold), as of June 30, 2003, totaled $14,993,000, a decrease of
$749,000 (4.76%) from the December 31, 2002 total of $15,742,000.  The aggregate
market value of investment  securities  held by the Bank as of June 30, 2003 was
$106,696,000  compared to  $92,274,000  as of December 31,  2002, a  $14,422,000
(15.63%) increase.

          Deposits as of June 30, 2003 totaled $256,302,000 which is an increase
of $14,882,000  (6.16%) from  $241,420,000 at December 31, 2002. Demand deposits
as of June 30, 2003  totaled  $66,676,000  which is an  increase  of  $7,614,000
(12.89%) from $59,062,000 at December 31, 2002. NOW accounts as of June 30, 2003
totaled  $24,084,000  which is an increase of $13,000 (.05%) from $24,071,000 at
December  31,  2002.   Money  market  accounts  as  of  June  30,  2003  totaled
$22,528,000,  which is an increase of $2,639,000  (13.27%),  from $19,889,000 at
December 31, 2002. Savings deposits as of June 30, 2003 totaled $52,285,000,  an
increase  of  $4,669,000   (9.8%)  from   $47,616,000   at  December  31,  2002.
Certificates of deposit over $100,000  totaled  $17,737,000 on June 30, 2003, an
increase of $39,000  (0.22%) from  $17,698,000 at December 31, 2002.  Other time
deposits (made up of  certificates  of deposit less than $100,000 and individual
retirement  accounts)  totaled  $72,315,000 on June 30, 2003, a $767,000 (1.05%)
decrease from the $73,082,000 total at December 31, 2002.

          Asset Quality. The following table sets forth the amount of the Bank's
restructured  loans,  non-accrual  loans and accruing loans 90 days or more past
due at the dates indicated.


                                       9
<PAGE>


<TABLE>
<CAPTION>
                                                                          At June 30,       At December 31,
                                                                             2003                2002
                                                                             ----                ----
                                                                               (Dollars in Thousands)

<S>                                                                            <C>                <C>
Restructured loans                                                             $0                 $41
                                                                               ==                 ===

Non-accrual loans:
   Real estate - mortgage:
     Residential                                                             $425                $264
     Commercial                                                                 0                 178
   Real estate - construction                                                   8                   7
   Installment                                                                 54                 112
   Credit card & related                                                        0                   0
   Commercial                                                                 186                  10
                                                                             ----                ----

       Total non-accrual loans                                                673                 571
                                                                             ----                ----

Accruing loans past due 90 days or more: Real estate - mortgage:
     Residential                                                                1                   1
     Commercial                                                                 0                   0
   Real estate - construction                                                   6                   0
   Installment                                                                  0                  14
   Credit card & related                                                        0                   0
   Commercial                                                                   0                   0
   Other                                                                        0                   0
                                                                             ----                ----

       Total accruing loans past due 90 days or more                            7                  15
                                                                             ----                ----

       Total non-accrual and past due loans                                  $680                $586
                                                                             ====                ====

Non-accrual and past due loans to gross loans                               0.41%               0.36%
                                                                            =====               =====

Allowance for credit losses to non-accrual and past due loans             343.68%             429.10%
                                                                          =======             =======
</TABLE>


          At June 30, 2003,  there were no loans  outstanding,  other than those
reflected  in the above  table,  as to which known  information  about  possible
credit problems of borrowers caused  management to have serious doubts as to the
ability of such  borrowers  to comply with present loan  repayment  terms.  Such
loans  consist  of loans  which  were not 90 days or more past due but where the
borrower is in bankruptcy or has a history of delinquency,  or the loan to value
ratio is considered  excessive due to  deterioration  of the collateral or other
factors.

          Allowance  For Credit  Losses.  The  allowance  for  credit  losses is
established through a provision for credit losses charged to expense.  Loans are
charged  against the allowance for credit losses when  management  believes that
the  collectibility  of the  principal  is  unlikely.  The  allowance,  based on
evaluations of the collectibility of loans and prior loan loss experience, is an
amount that  management  believes will be adequate to absorb  possible losses on
existing  loans  that  may  become  uncollectible.  The  evaluations  take  into
consideration  such  factors  as  changes  in the  nature and volume of the loan
portfolio,  overall  portfolio  quality,  review of specific  problem loans, and
current economic conditions and trends that may affect the borrowers' ability to
pay.




                                       10
<PAGE>

          Transactions  in the  allowance  for credit  losses for the six months
ended June 30, 2003 and 2002 were as follows:

<TABLE>
<CAPTION>
                                                                                                  Six Months Ended
                                                                                                      June 30,
                                                                                                   2003          2002
                                                                                                   ----          ----
                                                                                                 (Dollars in Thousands)

<S>                                                                                               <C>           <C>
Beginning balance                                                                                 $2,515        $2,938

Charge-offs                                                                                         (405)         (323)
Recoveries                                                                                           227           151
                                                                                                  ------        ------
Net charge-offs                                                                                     (178)         (172)
Provisions charged to operations                                                                       0             0
                                                                                                  ------        ------
Ending balance                                                                                    $2,337        $2,766
                                                                                                  ======        ======

Average loans                                                                                   $158,956      $162,366
Net charge-offs to average loans (annualized)                                                       0.22%         0.21%

</TABLE>

          Reserve for Unfunded  Commitments.  As of June 30, 2003,  the Bank had
outstanding  commitments  totaling  $16,355,749.  These outstanding  commitments
consisted  of  letters  of  credit,  undrawn  lines of  credit,  and other  loan
commitments.  The following  table shows the Bank's  allowance for credit losses
arising from these unfunded commitments:

                                                      Six Months Ended
                                                          June 30,
                                                     2003          2002
                                                     ----          ----
                                                  (Dollars in Thousands)

Beginning balance                                     $150         $150

Provisions charged to operations                         0            0
                                                      ----         ----
Ending balance                                        $150         $150
                                                      ====         ====


LIQUIDITY AND CAPITAL RESOURCES

          The Company  currently has no business other than that of the Bank and
does  not  currently  have  any  material  funding  commitments.  The  Company's
principal sources of liquidity are cash on hand and dividends  received from the
Bank. The Bank is subject to various  regulatory  restrictions on the payment of
dividends.

          The Bank's  principal  sources of funds for investments and operations
are net income,  deposits from its primary  market area,  principal and interest
payments on loans,  interest received on investment securities and proceeds from
maturing  investment  securities.  Its principal funding commitments are for the
origination or purchase of loans and the payment of maturing deposits.  Deposits
are  considered  a primary  source of funds  supporting  the Bank's  lending and
investment activities.

          The Bank's most liquid assets are cash and cash equivalents, which are
cash on hand,  amounts  due from  financial  institutions,  federal  funds sold,
certificates of deposit with other financial  institutions that have an original
maturity of three months or less and money market  mutual  funds.  The levels of
such assets are  dependent  on the Bank's  operating  financing  and  investment
activities  at any  given  time.  The  variations  in  levels  of cash  and cash
equivalents  are  influenced by deposit  flows and  anticipated  future  deposit
flows.   The  Bank's   cash  and  cash   equivalents   (cash  due  from   banks,
interest-bearing  deposits in other  financial  institutions,  and federal funds
sold), as of June 30, 2003, totaled $14,993,000,  a decrease of $749,000 (4.76%)
from the December 31, 2002 total of $15,742,000.



                                       11
<PAGE>

          As of June 30, 2003,  the Bank was  permitted to draw on a $35,500,000
line of credit from the FHLB of Atlanta.  Borrowings  under the line are secured
by a floating  lien on the Bank's  residential  mortgage  loans.  As of June 30,
2003, a $7.0 million  long-term  convertible  advance was outstanding under this
line, and a short-term  borrowing of $1,000,000  outstanding under this line. In
addition, the Bank has an unsecured line of credit in the amount of $5.0 million
from another commercial bank on which it has not drawn. Furthermore,  as of June
30,  2003,  the  Company  had   outstanding   $5,155,000  of  its  10.6%  Junior
Subordinated  Deferrable  Interest  Debentures  issued to Glen Burnie  Statutory
Trust I, a Connecticut statutory trust subsidiary of the Company.

          The Company's  stockholders'  equity increased by $1,727,000 or 7.93%,
during the six months ended June 30, 2003, due to earnings,  partially offset by
decreases  in  equity  accounts  from  dividend  distributions.   The  Company's
accumulated  other  comprehensive  income net of tax  increased by $637,000 from
$1,528,000 income at December 31, 2002 to $2,165,000 income at June 30, 2003, as
a result of unrealized  holding gains relating to securities held for investment
arising during the period.  Retained  earnings  increased by $986,000 during the
six month period as the result of earnings during the period,  partially  offset
by dividends  declared.  In addition,  $86,000 was transferred to  stockholders'
equity in  consideration  for shares to be issued under the  Company's  dividend
reinvestment plan in lieu of cash dividends.

          The Federal  Reserve  Board and the FDIC have  established  guidelines
with respect to the maintenance of appropriate levels of capital by bank holding
companies and state non-member banks,  respectively.  The regulations impose two
sets of capital adequacy  requirements:  minimum  leverage rules,  which require
bank  holding  companies  and banks to  maintain a  specified  minimum  ratio of
capital to total  assets,  and  risk-based  capital  rules,  which  require  the
maintenance of specified minimum ratios of capital to "risk-weighted" assets. At
June 30, 2003, the Bank was in full compliance with these guidelines with a Tier
1 leverage  ratio of 8.93%,  a Tier 1 risk-based  capital  ratio of 14.05% and a
total risk-based capital ratio of 15.3%.

CRITICAL ACCOUNTING POLICIES

          The preparation of financial  statements in conformity with accounting
principles  generally accepted in the U.S. requires management to make estimates
and  assumptions  about  future  events that affect the amounts  reported in the
financial  statements  and  accompanying  notes.  Since future  events and their
effects  cannot be determined  with absolute  certainty,  the  determination  of
estimates  requires  the  exercise  of  judgment.  Management  has used the best
information  available  to make the  estimations  necessary to value the related
assets and liabilities based on historical experience and on various assumptions
which are believed to be  reasonable  under the  circumstances.  Actual  results
could differ from those  estimates,  and such differences may be material to the
financial  statements.  The Company  reevaluates  these  variables  as facts and
circumstances   change.   Historically,   actual   results   have  not  differed
significantly  from the Company's  estimates.  The following is a summary of the
more judgmental  accounting estimates and principles involved in the preparation
of the  Company's  financial  statements,  including the  identification  of the
variables most important in the estimation process:

          Allowance  for Credit  Losses.  The  allowance  for  credit  losses is
management's best estimate of the probable incurred credit losses in the lending
portfolio.  The Company performs periodic and systematic detailed reviews of its
loan  portfolio to identify and estimate the inherent  risks and assess  overall
collectibility. These reviews include loss forecast modeling based on historical
experiences  and  current  events  and  conditions  as well as  individual  loan
valuations.  In each analysis,  numerous portfolio and economic  assumptions are
made.

          Accrued Taxes.  Management  estimates  income tax expense based on the
amount it expects to owe various tax  authorities.  Accrued taxes  represent the
net  estimated  amount  due  or to  be  received  from  taxing  authorities.  In
estimating accrued taxes,  management  assesses the relative merits and risks of
the  appropriate tax treatment of  transactions  taking into account  statutory,
judicial and regulatory guidance in the context of the Company's tax position.


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

          Not applicable.




                                       12
<PAGE>

ITEM 4.   DISCLOSURE CONTROLS AND PROCEDURES

          The Company  maintains a system of disclosure  controls and procedures
that is designed to provide  reasonable  assurance  that  information,  which is
required to be  disclosed by the Company in the reports that it files or submits
under the  Securities and Exchange Act of 1934, as amended,  is accumulated  and
communicated  to management in a timely manner.  The Company's  Chief  Executive
Officer and Chief  Financial  Officer have  evaluated  this system of disclosure
controls and  procedures as of the end of the period  covered by this  quarterly
report,  and  believe  that  the  system  is  operating  effectively  to  ensure
appropriate  disclosure.  There have been no changes in the  Company's  internal
control over financial reporting during the most recent fiscal quarter that have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Company's internal control over financial reporting.




                                       13
<PAGE>

                          PART II - OTHER INFORMATION

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          On May 8, 2003, the Company held its Annual  Meeting of  Stockholders.
The matters  submitted to the  stockholders for a vote were: (i) the election of
four directors;  (ii) the  authorization  of the Board of Directors to select an
outside  auditing firm for the Company's  fiscal year ending  December 31, 2003;
and (iii) the  approval  of  amendments  to the  Company's  Bylaws to reduce the
stockholder  vote  required to amend the Bylaws from 80% to 66 2/3% of all votes
entitled to be cast.  The nominees  submitted  for  election as  directors  were
Charles L. Hein, Alan E. Hahn, Shirley E. Boyer, and John I. Young.

          At the Meeting,  at least 1,434,505 shares were voted in favor of each
nominee,  no more than 5,472  shares  were  voted to  withhold  approval  of any
director.  As a result,  all of the nominees  were elected to serve as directors
until the next  annual  meeting of  shareholders  of the Company and until their
successors are duly elected and qualified.  Directors not up for re-election and
continuing in office after the Meeting are: John E. Demyan, Theodore L. Bertier,
Jr., F. W. Kuethe,  III, Mary Lou Wilcox,  F. William  Kuethe,  Jr.,  William N.
Scherer, Sr., Thomas Clocker, and Karen Thorwarth.

          At the Meeting,  the Board of Directors  was  authorized  to select an
outside auditing firm, with 1,439,620 shares voting in favor of the measure, 367
shares  voting to  withhold  authorization,  and 4,153  shares  abstaining.  The
stockholders  did not approve  the  amendments  to the  Company's  Bylaws,  with
1,237,983  shares  voting in favor of the  amendments,  9,357  shares  voting to
withhold approval, and 21,407 shares abstaining.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits:

Exhibit No.
- -----------

3.1       Articles of Incorporation (incorporated by reference to Exhibit 3.1 to
          Amendment No. 1 to the Registrant's  Form 8-A filed December 27, 1999,
          File No. 0-24047)

3.2       By-Laws  (incorporated by reference to Exhibit 3.2 to the Registrant's
          Annual  Report on Form 10-K for the  Fiscal  Year Ended  December  31,
          1998, File No. 0-24047)

3.3       Articles  Supplementary,  dated  November  16, 1999  (incorporated  by
          reference to Exhibit 3.3 to the  Registrant's  Current  Report on Form
          8-K filed December 8, 1999, File No. 0-24047)

4.1       Rights Agreement,  dated as of February 13, 1998,  between Glen Burnie
          Bancorp and The Bank of Glen Burnie,  as Rights Agent,  as amended and
          restated as of December 27, 1999 (incorporated by reference to Exhibit
          4.1 to Amendment No. 1 to the Registrant's Form 8-A filed December 27,
          1999, File No. 0-24047)

10.1      Glen Burnie  Bancorp  Director Stock  Purchase Plan  (incorporated  by
          reference to Exhibit  99.1 to  Post-Effective  Amendment  No. 1 to the
          Registrant's Registration Statement on Form S-8, File No. 33-62280)

10.2      The Bank of Glen Burnie Employee Stock Purchase Plan  (incorporated by
          reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form
          10-Q for the Period Ended March 31, 2002, File No. 0-24047)

10.3      Amended and Restated Change-in-Control Severance Plan (incorporated by
          reference to Exhibit 10.3 to the  Registrant's  Annual  Report on Form
          10-K for the Fiscal Year Ended December 31, 2001, File No. 0-24047)

10.4      The Bank of Glen Burnie Executive and Director  Deferred  Compensation
          Plan  (incorporated  by reference to Exhibit 10.4 to the  Registrant's
          Annual  Report on Form 10-K for the  Fiscal  Year Ended  December  31,
          1999, File No. 0-24047)

31.1      Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer*

31.2      Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer*

32.1      Section 1350 Certifications

     (b)  Reports on Form 8-K:

                  None.


                                       14
<PAGE>

                                   SIGNATURES

          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          GLEN BURNIE BANCORP
                                          (Registrant)


Date: August 14, 2003                     By:   /s/ F. William Kuethe, Jr.
                                             -----------------------------------
                                             F. William Kuethe, Jr.
                                             President, Chief Executive Officer


                                          By:   /s/ John E. Porter
                                             -----------------------------------
                                             John E. Porter
                                             Chief Financial Officer


                                       15
<PAGE>

                                                                    Exhibit 31.1
                                                                    ------------

                                  CERTIFICATION


         I, F. William Kuethe, Jr., certify that:

          1. I have reviewed this  Quarterly  Report on Form 10-Q of Glen Burnie
Bancorp;

          2. Based on my  knowledge,  this  report  does not  contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not misleading with respect to the period covered by this report;

          3.  Based  on  my  knowledge,  the  financial  statements,  and  other
financial  information  included in this report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
Registrant as of, and for, the periods presented in this report;

          4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

          (a)  Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               Registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          (b)  Evaluated  the  effectiveness  of  the  Registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          (c)  Disclosed in this report any change in the Registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               Registrant's most recent fiscal quarter (the Registrant's  fourth
               fiscal  quarter  in  the  case  of an  annual  report)  that  has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   Registrant's   internal  control  over  financial
               reporting; and

          5. The  Registrant's  other  certifying  officer and I have disclosed,
based  on  our  most  recent  evaluation  of  internal  control  over  financial
reporting,  to the Registrant's auditors and the audit committee of Registrant's
board of directors (or persons performing the equivalent function):

          (a)  All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the Registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          (b)  Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  Registrant's
               internal control over financial reporting.


Date: August 14, 2003                           /s/ F. William Kuethe, Jr.
                                            ------------------------------------
                                            F. William Kuethe, Jr.
                                            Chief Executive Officer






<PAGE>

                                                                    Exhibit 31.2
                                                                    ------------

                                  CERTIFICATION


          I, John E. Porter, certify that:

          1. I have reviewed this  Quarterly  Report on Form 10-Q of Glen Burnie
Bancorp;

          2. Based on my  knowledge,  this  report  does not  contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not misleading with respect to the period covered by this report;

          3.  Based  on  my  knowledge,  the  financial  statements,  and  other
financial  information  included in this report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
Registrant as of, and for, the periods presented in this report;

          4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

          (a)  Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               Registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          (b)  Evaluated  the  effectiveness  of  the  Registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          (c)  Disclosed in this report any change in the Registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               Registrant's most recent fiscal quarter (the Registrant's  fourth
               fiscal  quarter  in  the  case  of an  annual  report)  that  has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   Registrant's   internal  control  over  financial
               reporting; and

          5. The  Registrant's  other  certifying  officer and I have disclosed,
based  on  our  most  recent  evaluation  of  internal  control  over  financial
reporting,  to the Registrant's auditors and the audit committee of Registrant's
board of directors (or persons performing the equivalent function):

          (a)  All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the Registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          (b)  Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  Registrant's
               internal control over financial reporting.


Date: August 14, 2003                           /s/ John E. Porter
                                            ------------------------------------
                                            John E. Porter
                                            Chief Financial Officer





<PAGE>

                                                                    Exhibit 32.1
                                                                    ------------


                           SECTION 1350 CERTIFICATIONS


          In connection  with the Quarterly  Report of Glen Burnie  Bancorp (the
"Company")  on Form 10-Q for the period  ending  June 30, 2003 as filed with the
Securities and Exchange Commission and to which this Certification is an exhibit
(the "Report"),  the undersigned hereby certify,  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

          (1) The Report fully complies with the  requirements  of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information  contained in the Report fairly  presents,  in all
material  respects,  the  financial  condition  and result of  operations of the
Company for the periods reflected therein.



Date: August 14, 2003                           /s/ F. William Kuethe, Jr.
                                            ------------------------------------
                                            F. William Kuethe, Jr.
                                            President, Chief Executive Officer


                                                /s/ John E. Porter
                                            ------------------------------------
                                            John E. Porter
                                            Chief Financial Officer






</TEXT>
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</SEC-DOCUMENT>
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